The venture industry, which thrived over the past decade, is now facing challenges due to its large size and diminishing exits, increasing the pressure to deliver high returns just as exits become harder to achieve. Cash distributions to LPs have plummeted to their lowest levels since the global financial crisis, dropping to 5.1% of net asset value in 2023 from over 30% in 2021. With large portfolios and limited exits, a major rebound in tech IPOs is needed to restore VC performance to its former glory; however, the IPO market remains slow. Recent unicorn IPOs, such as Astera Labs and Reddit, are not significant enough to impact an industry now needing numerous large offerings to achieve meaningful returns. By the end of 2023, US VC firms were managing nearly $1.2 trillion, yet this vast amount of capital is not translating into cash distributions. The Federal Reserve’s decision to delay expected rate cuts has further dampened hopes for a near-term recovery in tech multiples and IPOs. As a result, LPs are increasingly cautious about renewing commitments to VC, given the substantial capital currently tied up in investor portfolios.

Did you think closing an M&A deal in the next year was going to be a walk in the park? Think again. The FTC and DOJ have decided that life just isn't complicated enough, so they're revamping the documentation required under the Hart-Scott-Rodino (HSR) Act. Enacted in 1976, this antitrust legislation demands companies file paperwork before sealing a merger or acquisition over a certain threshold ($119.5+ million in 2024, for the curious). Paperwork makes sense, that's not too bad, right? Wrong. We are all about to find out just how bad it can be. Last summer, the agencies proposed sweeping changes that would make the HSR filing process a Herculean task, requiring companies to report much more granular information on topics such as ownership structures, business operations, investment vehicles, previous acquisitions, and the potential ripple effects a deal could have on competition, supply chain relationships, and labor markets. They even want to know the latitude and longitude of your business units. Yes, we are being serious. The FTC estimates that the revisions could quadruple the time needed for completion, but industry insiders think even that’s optimistic. Where most efficient firms could slap an HSR together in a week, it's now looking more like a month—if you're lucky.